A company offers ID theft protection using leads obtained from client banks Thre

Question

A company offers ID theft protection using leads obtained from client banks Three employees work 40 hours a week on the leads, at a pay rate of $40 per hour per employee Each employee identifies an average of 2, 600 potential leads a week from a list of 5, 400. An average of 5 percent of potential leads actually sign up for the service, paying a one-time fee of $70. Material costs are $1, 300 per week and overhead costs are $8,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input (Round your answer to 2 decimal places.)

Explanation / Answer

Multifactor productivity = (Possible Leads*No of workers*Fee*conversation percentage)/(labor cost + material cost + overhead cost)

Possible leads = 2,600 leads

No of employees = 3

Fee = $70

conversation percentage =5%= 0.05

Labor cost = 3employees*40hours*40per hour = $4800

Material cost = $1,300 per week

Overhead cost = $8000

Multifactor productivity = (2600*3*70*0.05)/(4800+1,300+8000) = 27300/14100 = 1.94

Multifactor productivity = 1.94 per dollar of input

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